Archive for ‘Trump administration’

08/07/2019

World cannot shut China out, vice president says, in jab at U.S.

BEIJING (Reuters) – China and the rest of the world must co-exist, Vice President Wang Qishan said on Monday, in an indirect jab at the United States, with which Beijing is trying to resolve a bitter trade war.

Top representatives of the world’s two biggest economies are trying to resume talks this week to try and resolve their year-long trade dispute, which has seen the two countries place increasingly harsh tariffs on each other’s imports.

The Trump administration has accused China of engaging in unfair trade practices that discriminate against U.S. firms, forced technology transfers and intellectual property rights theft. Beijing has denied all the charges.

“China’s development can’t shut out the rest of the world. The world’s development can’t shut out China,” Wang told the World Peace Forum at Beijing’s elite Tsinghua University.

He also warned against “protectionism in the name of national security”, but without mentioning the United States, and urged major powers to make greater contributions to world peace.

China has also been angered by U.S. sanctions against tech giant Huawei Technologies Co Ltd over national security concerns, and U.S. visa curbs on its students and academics.

In his speech, Wang, who is extremely close to Chinese President Xi Jinping and rarely speaks in public, reiterated China’s commitment to opening up.

“Large countries must assume their responsibilities and set an example, make more contributions to global peace and stability, and broaden the path of joint development,” he added.

“Development is the key to resolving all issues,” Wang, who became vice president last year, after having led Xi’s fight to root out corruption, told an audience that included Western diplomats based in Beijing and former European Council President Herman Van Rompuy.

“NOT A RATIONAL ACTION”

The United States should not blame China for the problems it is facing, Vice Foreign Minister Le Yucheng told the forum later.

“Viewing China as the enemy is not a rational action,” the foreign ministry quoted him as saying, adding that China would not put up “high walls” or “decouple itself from any country”.

China has been nervous that the United States is seeking to sever, or at least severely curb, economic links, in what has been called a “decoupling”.

Tariff, trade, finance and science and technology wars are “turning back the clock on history,” Le said. “The consequences will be extremely dangerous.”

The two sides have communicated by telephone since last month’s summit of leaders of Group of 20 major nations in Japan, at which U.S. President Donald Trump and Xi agreed to relaunch stalled talks.

Talks broke down in May, after U.S. officials accused China of pulling back from commitments previously made in the text of an agreement negotiators said was nearly finished.

The countries have also been at loggerheads over issues ranging from human rights to the disputed South China Sea and U.S. support of self-ruled Taiwan, which China claims as its own.

No matter how the international situation or China developed, Vice President Wang said, the country would follow the path of peace, and not seek spheres of influence or expansion.

“If there is no peaceful, stable international environment, there will be no development to talk of.”

Source: Reuters

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15/06/2019

Lessons from an old trade war: China can learn from the Japan experience

  • In the last half of the 20th century US worries about a rising Japan led to tariffs and technology mistrust
  • Differences in the Chinese experience may predict a different outcome
Toshiba was one of the companies affected by US actions to prevent the rise of Japan in a trade war that echoes in today’s tensions between the US and China. Photo: Reuters
Toshiba was one of the companies affected by US actions to prevent the rise of Japan in a trade war that echoes in today’s tensions between the US and China. Photo: Reuters
If history is a mirror to the future, the similarities between the spiralling technology stand-off between China and the US and the economic wars waged by the US with Japan – which peaked in the 1980s and 1990s – may be instructive. But there are differences between the two which may predict a different outcome.
The US-Japan economic tensions started in the 1950s over textiles, extended to synthetic fibres and steel in the 1960s, and escalated – from the 1970s to 1990s – to colour televisions, cars and semiconductors, as Japan’s adjusted industrial policy and technology development moved it up the industrial chain.
Boosted by government support, Japan’s semiconductor industry surpassed the US as the world’s largest chip supplier in the early 1980s, causing wariness and discontent in the US over national security risks and its loss of competitiveness in core technologies.

The Reagan administration regarded Japan as the biggest economic threat to the US. Washington accused Tokyo of state-sponsored industrial policies, intellectual property theft from US companies, and of dumping products on the American market.

The US punished Japanese companies for allegedly stealing US technology and illegally selling military sensitive products to the Soviet Union. It also forced Japan to sign deals to share its semiconductor technologies and increase its purchases of US semiconductor products.

“The Trump administration is using similar tactics against China that were used against Japan in the 1980s and 1990s,” said an adviser to the Chinese government, on condition of anonymity, adding that the US was continuing its hegemony to curtail China’s tech development and was trying to mobilise its allies to follow suit.

After talks to end the US-China trade faltered last month, Huawei – a global leader in the 5G market – is now standing at centre stage of a protracted technology stand-off between Beijing and Washington, which has grown increasingly wary of the rising competitiveness of Chinese tech companies.

Zhang Monan, a researcher with the Beijing-based China Centre for International Economic Exchanges, does not foresee an easing of the rivalry between the US and China.

“The current US-China conflicts are more complicated than those between the US and Japan,” she said.

“The US will only get more intense in its containment of China and the tech rivalry won’t ease, even if China and the US could reach a deal to de-escalate the trade tensions.”

Huawei is at the centre of a technology stand-off between Beijing and Washington. Photo: AP
Huawei is at the centre of a technology stand-off between Beijing and Washington. Photo: AP

Back in 1982, the US justice department charged senior officials at Hitachi with conspiracy to steal confidential computer information from IBM and take it back to Japan. IBM also sued Hitachi. The two companies settled the case out of court and Hitachi paid 10 billion yen (US$92.3 million) to IBM in royalties in 1983, while accepting IBM inspections of its new software products for the next five years.

Toshiba, a major electronics producer in Japan, and Norway’s Kongsberg Vaapenfabrikk secretly sold sophisticated milling machines to the Soviet Union from 1982 to 1984, helping to make its submarines quieter and harder to detect. This transfer of sensitive military technology in the middle of an arms race between the US and the Soviet Union was not revealed until 1986.

The US issued a three-year ban on Toshiba products in 1987 and the company ran full-page advertisements in more than 90 American newspapers apologising for its actions.

In 1985, the US imposed 100 per cent tariffs on Japanese semiconductors. A year later, in its five-year semiconductor deal with the US, Japan agreed to monitor its export prices, increase imports from the US, and submit to inspections by the Office of the United States Trade Representative.

A display of chips designed by Huawei for 5G base stations on show at the China International Big Data Industry Expo. Photo: AP
A display of chips designed by Huawei for 5G base stations on show at the China International Big Data Industry Expo. Photo: AP

This was followed by a second five-year semiconductor deal in 1991, in which Japan agreed to double the US market share in Japan to 20 per cent. In yet another bilateral semiconductor deal in 1989 Japan was required to open its semiconductor patents to the US.

Meanwhile, the US government boosted its efforts to help American businesses cement their industrial leverage in the chip sector and unveiled rules to protect its domestic chip industry.

The two countries were irreconcilable in 1996 on how to measure their respective market share. Overall market circumstances had also changed by then, with the US becoming competitive in microprocessing, and South Korea and Taiwan emerging as strong rivals to Japan.

Its dominance in semiconductors lost, Japan reached out to Europe for a range of cooperative technology deals.

Cooperate, don’t confront: academic advises Beijing on trade war tactics

“History can tell that high technology matters greatly to national security strategies. It is not a process of mere market competition. It follows the law of the jungle,” Zhang said.

The US has intensified its investment scrutiny by rolling out the Foreign Investment Risk Review Modernisation Act last year, which extends the regulation to key industrial technology sectors.

Zhang predicted the US would continue to contain China’s technological development in key sectors such as AI, aerospace, robots and nanotechnology – all of which are of great importance to Beijing.

The US has said Chinese tech giants Huawei and ZTE present a national security risk. Last April it cut US supplies to ZTE, citing violations of sanctions against Iran and North Korea. The ban was removed three months later after ZTE paid US$1.4 billion in fines.

It was a wake-up call for China to develop its own core technologies. The subsequent US ban on Huawei added to the urgency to do so, observers said.

Wang Yiwei, a professor in international relations with Renmin University, said China had to develop its own hi-tech know-how while continuing the opening up process.

“China has paid a price to learn whose globalisation it is,” he said.

“We may see some extent of disengagement with the US in technology and dual-use sectors, but China can speed up cooperation with European countries, and other countries such as Israel, to offset the risks from the US.”

In December, the US filed criminal charges against Huawei and its chief financial officer Sabrina Meng Wanzhou, alleging bank fraud, obstruction of justice and technology theft.

The squeeze continued last month with the US blacklisting Huawei, restricting its access to American hi-tech supplies and putting pressure on its allies to freeze the company out of the 5G market. So far, those allies, including Germany and Japan, have remained hesitant about meeting the US request and refrained from siding with either country.

Chinese foreign ministry spokesman Geng Shuang said on Monday that Huawei had obtained 46 commercial contracts in 30 countries as of June 6, “including some US allies and some European countries that the US has been working hard to persuade out of the contracts”.

For Zhang, the differences between Japan’s experience of US concerns of technological advancement and China’s may offer some hope for Chinese ambitions.

“Dependent on US for security protection, Japan was limited in [its ability to] push back and was already a developed country,” she said.

“But China has huge domestic market potential to address the imbalance [between] economic and technology development. This remains a big attraction to multinational companies, which would enable China to integrate into global innovation and technology cooperation, but China has to figure out how to dispel the doubts on its growth model.”

Source: SCMP

23/05/2019

U.S. Navy again sails through Taiwan Strait, angering China

WASHINGTON (Reuters) – The U.S. military said it sent two Navy ships through the Taiwan Strait on Wednesday, its latest transit through the sensitive waterway, angering China at a time of tense relations between the world’s two biggest economies.

Taiwan is one of a growing number of flashpoints in the U.S.-China relationship, which also include a bitter trade war, U.S. sanctions and China’s increasingly muscular military posture in the South China Sea, where the United States also conducts freedom-of-navigation patrols.

The voyage will be viewed by self-ruled Taiwan as a sign of support from the Trump administration amid growing friction between Taipei and Beijing, which views the island as a breakaway province.

The transit was carried out by the destroyer Preble and the Navy oil tanker Walter S. Diehl, a U.S. military spokesman told Reuters.

“The ships’ transit through the Taiwan Strait demonstrates the U.S. commitment to a free and open Indo-Pacific,” Commander Clay Doss, a spokesman for the U.S. Navy’s Seventh Fleet, said in a statement.

Doss said all interactions were safe and professional.

Chinese Foreign Ministry spokesman Lu Kang said Beijing had lodged “stern representations” with the United States.
“The Taiwan issue is the most sensitive in China-U.S. relations,” he told a daily news briefing in Beijing.
Taiwan’s Defense Ministry said the two U.S. ships had sailed north through the Taiwan Strait and that they had monitored the mission.
Taiwan President Tsai Ing-wen said there was no cause for alarm.
“Nothing abnormal happened during it, please everyone rest assured,” she wrote on her Facebook page.
U.S. warships have sailed through the Taiwan Strait at least once a month since the start of this year. The United States restarted such missions on a regular basis last July.
The United States has no formal ties with Taiwan but is bound by law to help provide the island with the means to defend itself and is its main source of arms.
The Pentagon says Washington has sold Taipei more than $15 billion in weaponry since 2010.
China has been ramping up pressure to assert its sovereignty over the island, which it considers part of “one China” and sacred Chinese territory, to be brought under Beijing’s control by force if needed.
Beijing said a recent Taiwan Strait passage by a French warship, first reported by Reuters, was illegal.
China has repeatedly sent military aircraft and ships to circle Taiwan on exercises in the past few years and worked to isolate it internationally, whittling down its few remaining diplomatic allies.
The U.S. Defense Intelligence Agency released a report earlier this year describing Taiwan as the “primary driver” for China’s military modernization, which it said had made major advances in recent years.
On Sunday, the Preble sailed near the disputed Scarborough Shoal claimed by China in the South China Sea, angering Beijing.
The state-run China Daily said in an editorial on Wednesday that China had shown “utmost restraint”.
“With tensions between the two countries already rife, there is no guarantee that the presence of U.S. warships on China’s doorstep will not spark direct confrontation between the two militaries,” it said.
Source: Reuters
20/05/2019

U.S. ambassador to China to make first visit to Tibet since 2013 – report

WASHINGTON (Reuters) – U.S. Ambassador to China Terry Branstad was due to begin visiting Tibet on Sunday for official meetings and visits to religious and cultural sites, according to a news report on Sunday.

Branstad was scheduled to visit the Tibet Autonomous Region and Qinghai Province, a historic region of Tibet known to Tibetans as Amdo, from Sunday to Saturday, Radio Free Asia said in a report.

The State Department did not immediately comment on the story.

Radio Free Asia said it would be the first visit to Tibet by a U.S. official since the U.S. Congress approved a law in December that requires the United States to deny visas to Chinese officials in charge of implementing policies that restrict access to Tibet for foreigners. The U.S. government is required to begin denying visas by the end of this year.

In December, China denounced the United States for passing the law, saying it was “resolutely opposed” to the U.S. legislation on what China considers an internal affair, and it risked causing “serious harm” to their relations.

Since then, tensions have been running high between the two countries over trade. China struck a more aggressive tone in its trade war with the United States on Friday, suggesting a resumption of talks between the world’s two largest economies would be meaningless unless Washington changed course.

On Saturday, China’s senior diplomat Wang Yi told U.S. Secretary of State Mike Pompeo that recent U.S. words and actions had harmed the interests of China and its enterprises, and that Washington should show restraint.

While the Trump administration has taken a tough stance towards China on trade and highlighted security rivalry with Beijing, the administration has so far not acted on congressional calls for it to impose sanctions on China’s former Communist Party chief in Tibet, Chen Quanguo, for the treatment of minority Muslims in Xinjiang province, where he is currently party chief. 

A State Department report in March said Chen had replicated in Xinjiang, policies similar to those credited with reducing opposition to Chinese rule in Tibet.

Beijing sent troops into remote, mountainous Tibet in 1950 in what it officially terms a peaceful liberation and has ruled there with an iron fist ever since.

Source: Reuters

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